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Technology Stocks : OnSale Inc.
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To: saber hormi who wrote (2931)12/30/1998 12:30:00 AM
From: Jim Duffett  Read Replies (1) of 4903
 
An interesting observation about year end:

For those around last quarter, Onsale blew out a pile of merchandise (several million $) the last few days with no minimum bids and got drilled. They offered 1497 IBM hard drives that went for almost $100
less each than normal. They offered 1003 exercise machines that most went for $9. It was suicide, there were not 1004 bidders.

My bet at the time was that it was a desperation move and it was.
GMS was 63 mil, not earthshaking, and they sacrificed margin to do it.

Right now, there is more merchandise for sale that at any time in the history of Onsale. Better than $5 mil at a quick take. There are ZERO suicide-like bargains. Very few items were offered at $1 bids or even
below normal. They have 236 Sony PII-350 systems for $1,249 MINIMUM.
Only 45 or so bid. I daresay any one of us doing 5 minutes of research on the web could find a similar PII-450 for the same price.

That is just one small example. My question I guess is:

Are they so comfortable with sales that they are willing to keep minimums so high? Or do margins need a boost that badly?

Or best of all, are margins and sales both strong?

Also judging by what is offered right now, their inventory is gonna come in pretty high. Might take some heat for that too.

For those of you trying to figure this stock out technically and draw conclusions:
You are wasting your time. I have given this thing up for dead half a dozen times over the last year based on its trading only to be dumbfounded a week later.

Happy New Year to all,
Duff
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